Banks’ failure and financial crises are consequences of non-performing loans, and it is of great importance when it comes to microfinance banking system because it is more than mere loan repayment problems. Rather, it is an important determining factor of their failure or survival in market. The purpose of this study is to examine the impact of bank specific (micro-level factors) as well as macro-economic factors on NPLs to understand their impact and effect on microfinance banks. Microfinance banking sector has significant contribution in terms of financial inclusion in an economy. Sustainable Development Goal number 8 calls for expanding financial services to people (typically low-income) which encourages economic growth. This research employs published secondary data from 2011-2020 of micro-economic and macro-economic factors as independent variables and NPLs as dependent variable. The present study applies regression analysis to determine the explanatory power of the independent variables in explicating the NPLs. The findings of this empirical research contribute in guiding bankers to develop better understanding of their performance in terms of efficiency, riskiness, profitability and further it facilitates investors to take precision decisions.
Syed, A. A. (2021). Determinants of Nonperforming Loans: A Review of Empirical Evidence. New Challenges for Future Sustainability and Wellbeing, 287-316.
Dr. Anjum Ihsan, Dr. Mustafa Afeef, Kaleem Ullah, & Dr. Syed Naseebullah Shah. (2021). Non-performing Loans and Bank Stability: Evidence from Pakistan. International Journal of Innovation, Creativity and Change, 207-226.
Anil Ari, Sophia Chen, and Lev Ratnovski. (2021). The dynamics of non-performing loans during banking crises: A new database with post-COVID-19 implications. Journal of Banking and Finance, 1-22.
Bako Yusuf Adebola, Oyegoke Adebusola Adebola, Idowu Afolasade Florence, & Aderemi Timothy Ayomitunde. (2021). Microfinance Banks, Small and Medium Scale Enterprises and COVID-19 Pandemic in Nigeria. European Journal of Economics, Law and Politics, ELP, 1-10.
Siti Epa Hardiyanti and Lukmanul Hakim Aziz. (2021). The Case of COVID-19 impact on the level of non-performing loans of conventional commercial banks in Indonesia. Banks and Bank Systems, 62-68.
Zahid Iqbal, Muhammad Akram, Hassan Ahmad. (2021). IS MULTIPLE BORROWING A BAD SIGN? EVIDENCE FROM MICROFINANCE INSTITUTIONS IN PAKISTAN. Humanities & Social Sciences Reviews, 776-788
Kristijan Ristić and Mirjana Jemović. (2021). ANALYSIS OF NON-PERFORMING LOANS’ DETERMINANTS IN THE BANKING SECTOR OF THE REPUBLIC OF SERBIA. ECONOMIC THEMES, 133-151.
Elsembawy, A. (2021). BASEL I, II, III. Switzerland : Bank of International Settlements.
Serrano, A. S. (2020). The impact of non-performing loans on bank lending in Europe: an empirical analysis. North American Journal of Economics & Finance, 1-37.
Muhammad Asif Khan, Asima Siddique, & Zahid Sarwar. (2020). Determinants of non-performing loans in the banking sector in developing state. Asian Journal of Accounting Research, 135-146.
T.S. AFOLABI, T. M. OBAMUYI & T. EGBETUNDE. (2020). Effect of Non-Performing Loans on Microfinance Banks’ Performancein Nigeria: A Granger Causality Approach . IOSR Journal of Business and Management (IOSR-JBM), 57-63.
Bauze, K. (2019). Non-Performing Loan Write-Offs: Practices in the CESEE region. Washington, DC: World Bank Group
I. Khan & A. Ahmed. (2017). Assessing banks internal factors as determinants of nonperforming loans: evidence from Pakistani commercial baks. Journal of managerial sciences, 1-11.
Esther Laryea, Matthew Ntow-Gyamfi and Angela Azumah Alu. (2016). Nonperforming loans and bank profitability: evidence from an emerging market. African Journal of Economic and Management Studies, 462-481.
CUCINELLI, D. (2015). The Impact of Non-performing Loans on Bank Lending Behavior: Evidence from the Italian Banking Sector. Eurasian Journal of Business and Economics, 59-71
Ekanayake E.M.N.N & Azeez A.A. (2015). DETERMINANTS OF NON-PERFORMING LOANS IN LICENSED COMMERCIAL BANKS: EVIDENCE FROM SRI LANKA. Asian Economic and Financial Review, 868-882.
Bilgrami Jaffery, N. (2015). NON-PERFORMING LOANS: Determinants and Impact on Banking Industry. Pakistan Journal of Applied Economics, 99-111.
Beck, T. (2015). Microfinance—A Critical Literature Survey. Washington, DC: IEG, Independent Evaluation Group, The World Bank.
Vasiliki Makri, Athanasios Tsagkanos and Athanasios Bellas. (2014). Determinants of Non-Performing Loans: The Case of Eurozone. PANOECONOMICUS, 193-206.
Bruna, S. (2013). Determinants of Non-Performing Loans in Central and Eastern European countries. FEB (Faculty of Economics and Business), 2-19.
Ahlem Selma Messai, & Fathi Jouini. (2013). MICRO AND MACRO DETERMINANTS OF NON-PERFORMING LOANS. INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL ISSUES, 852-860.
Warue, B. N. (2013). The Effects of Bank Specific and Macroeconomic Factors on Nonperforming Loans in Commercial Banks in Kenya: A Comparative Panel Data Analysis. Advances in Management & Applied Economics, 135-164
M. Badar and A.Y. javid. (2013). Impact of microeconomic forces on nonperforming loans: an empirical study of commercial banks in pakistan. Wseas Transactions on Businesses and Economics, 40-48.
M. Farhan, A. Satta, A.H. Chaudhry & F. Khalil. (2012). Economic Determinants of Nonperforming loans: perception of Pakistani Bankers'. European Journal of Business and Mangement vol.4 no.19, 87-99.
Dimitrios P. Louzis , Angelos T. Vouldis , & Vasilios L. Metaxas. (2012). Macroeconomic and bank-specific determinants of nonperforming loans in Greece: A comparative study of mortgage, business and consumer loan portfolios. Journal of Banking & Finance, 1012-1027.
Irum Saba, Rehana Kouser, & Muhammad Azeem. (2012). Determinants of NonPerforming Loans: Case of US Banking Sector. The Romanian Economic Journal, 141-152.
Atilla Cifter, Sait Yilmazer & Elif Cifter. (2009). Analysis of sectoral credit default cycle dependency with wavelet networks: Evidence from Turkey. Economic Modelling, 1382-1388.
Al-Smadi, M. O., & Ahmad, N. H. (2009). Factors affecting banks’ credit risk: Evidence from Jordan. Collage of Business, University Utara Malaysia, Malaysia.
Gabriel Jimenez & Jesús Saurina. (2006). Credit Cycles, Credit Risk, and Prudential Regulation. International Journal of Central Banking , 1-25.
C.J, G. (2004). Bank capital and credit risk taking in emerging market economies. Journal of Banking Regulation, 128-145
Leonides Buencamino and Sergei Gorbunov. (2002). Informal Money Transfer Systems: Opportunities and Challenges for Development Finance. New york NY: Discussion Paper of the United Nations Department of Economic & Social Affairs
Kwan, S. and R. Eisenbis. (1997). Bank risk, capitalisation and operating efficiency. Journal of Financial Services Research, 117-131
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright (c) 2022 Suad Sindhiya, Ms. Tooba Hashmi , Mahvish Khaskhely